Tuesday Report, April 12, 2011
Special to the Texas Low Income Housing Information Service
“Things are going to get worse before they get better” seems to be the mantra of economists following the US housing industry. The Obama Administration’s efforts to jump-start new mortgages and salvage troubled ones have largely failed. Republicans are now calling for and end to federal intervention.
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Housing still can’t find a date for economic recover
By Kevin G. Hall McClatchy Newspapers April 11, 2011
WASHINGTON — Many sectors of the U.S. economy are showing heartening signs of growth: Employment, international trade, manufacturing and professional services among them.
Then there’s the miserable housing sector. It’s still missing from the list of positives, still a net drag on the U.S. economic recovery.
Where’s the bottom? Four years into the housing crisis, specialists still aren’t sure if we’re on our way up or still have further to drop.
Mark Zandi, the chief economist for forecaster Moody’s Analytics, expects a bottom in home prices next year and recovery thereafter.
“House prices will bottom out by year’s end as the market works through a bulge of distressed sales,” Zandi said. “Sales, construction and prices will be recovering in earnest by this time next year.”
That’s too soon for Mark Vitner, a senior economist at Wells Fargo Securities in Charlotte, N.C. He doesn’t see the housing market returning to normal until 2016. Yes, five more years.
House Republicans: Failing mortgage-aid programs should go
By Barbara Barrett McClatchy Newspapers April 11, 2011
WASHINGTON — A handful of foreclosure prevention measures run by the Obama administration are so ineffectual, inefficient and complicated that, according to Republicans in the House of Representatives, the programs should be killed outright.
The House is scheduled to vote this week on getting rid of a refinance program for Federal Housing Administration loans and another program, scheduled to begin next month, that would help homeowners with delinquent payments.
The House Financial Services Committee is expected to vote Wednesday morning on ending two other measures: One of them is a massive effort that was designed to adjust up to 4 million mortgages but so far has tackled just half a million successfully. The other is the Neighborhood Stabilization Program, which steers money to communities hit hard by foreclosures.
The Treasury Department and many Democrats argue, though, that the programs — though flawed — are fixable, and consumer advocates say the measures offer the last, best hope for many struggling families.
New Rules for Mortgage Servicers Face Early Criticism
By David Streitfeld New York Times April 11, 2011
Federal banking regulators have not officially imposed their new rules for the top mortgage servicers, but criticism is already being heard. A wide coalition of consumer and housing groups is denouncing the legal agreements, which are likely to be published within a few days.
The new rules require the servicers to improve their processing systems, to stop foreclosing while negotiating to modify the loan and to give borrowers a single direct means of contact.
Servicers will be required to bring in a consultant to investigate complaints by homeowners who lost money because of foreclosure processing errors in 2009 and 2010. In some cases the homeowners could be compensated.
The problem, said Alys Cohen of the National Consumer Law Center, is the agreements “do not in any way require the servicers to stop avoidable foreclosures, and that is what we need.”
At the heart of the complaints by Ms. Cohen and others is whether the servicers, which are arms of the biggest banks, may be compelled to give households fighting foreclosure a better shot at renegotiating their loans and staying in their properties.
North Texas home sales, prices down
By Sandra Baker Fort Worth Star-Telegram April 7, 2011
Sales of existing homes in North Texas in March fell for the 10th straight month when compared to a year ago, but for the first time in several months the median home price also declined.
Homes sales were down 15 percent from March 2010, the Texas A&M Real Estate Center said today. In February, homes sales were down 17 percent from February 2010.
The median home price dropped 2 percent in March, to $140,000.
Also today, CoreLogic, a real estate research firm, said its February Home Price Index showed U.S. home prices declining in February for the seventh month in a row, dropping by 6.7 percent from a year earlier. In Tarrant County, home prices dropped 3.9 percent the same period, CoreLogic said.
Market experts were anticipating homes sales to be down in March because the data is being compared to a month last year when a federal tax break was still being offered to first-time home buyers, stimulating sales. Experts don’t expect home sales to start inching back up until later this year.
In March, there were 5,286 existing homes sold in the 29-county North Texas region. The Real Estate Center compiles data from the North Texas Real Estate Information Systems, which is managed by real estate agents.
State Farm is told to pay $350 million
Judge rules Texas customers were overcharged
By Terrence Stutz Dallas Morning News April 12, 2011
AUSTIN — State Farm Insurance owes nearly $350 million to customers it overcharged dating back to 2003, a state judge ruled Monday, siding with the Texas insurance commissioner.
State District Judge Tim Sulak found that state Commissioner Mike Geeslin acted properly when he ordered State Farm Lloyds, the company’s homeowners subsidiary, to reimburse an estimated 1.2 million customers for overcharges as well as penalty interest.
“There is substantial evidence to support the commissioner’s decision, and the decision is upheld,” Sulak said. He ruled quickly after listening to two hours of oral arguments from attorneys for State Farm, the Texas Department of Insurance and the Texas Office of Public Insurance Counsel.
State Farm indicated it would appeal the ruling, the latest twist in a case that has dominated debate over the state’s insurance market for nearly a decade.
“We knew no matter which way the judge ruled, an appeal from either party was highly likely in this case,” said Kevin Davis, a spokesman for the company. “State Farm Lloyds’ rates are, and always have been, fair and competitive – and we remain confident the commissioner’s order will be reversed.”
Full story at: http://www.chron.com/disp/story.mpl/business/7517456.html
City keeps its status as state’s emptiest
Vacancy rates rise in first-ring suburbs
Buffalo News April 5, 2011
Buffalo’s distinction as the emptiest city in the state remains intact.
No other large city, not Albany, not Syracuse, not even New York City, came close to matching the level of vacant housing in Buffalo.
New census figures put the city’s vacancy rate at 15.7 percent.
Niagara Falls was a close second at 13.8 percent, and Buffalo’s first-ring suburbs also showed increases in vacancy rates.
While Buffalo led the state in vacancies for the second time in as many census counts, the news could have been a lot worse, given its dramatic loss of population.
“You should have seen the number shoot way up, but it didn’t shoot up at all,” said Kathryn Foster, director of the University at Buffalo’s Regional Institute.
The city’s vacancy rate, in fact, was stable — high, but virtually unchanged from the last census count 10 years ago.
Just the opposite was true in the city’s first-ring suburbs, where vacancy rates increased across the board.
Full story at: http://www.buffalonews.com/city/article384614.ece
TRV’s Up a Creek
As the Trinity River Vision moves right along, local communities still aren’t safe from floods.
By Dan McGraw Fort Worth Weekly April 7, 2011
Layla Caraway wasn’t very political prior to the summer of 2007. The Haltom City resident and her husband had purchased a home in the inner-ring suburb four years before that summer, moving back into the city where she was raised. They had a nice patio that looked out on Big Fossil Creek and enjoyed the comfortable backyard with heir two dogs.
Then the rains came. In June, a 4-year-old girl was ripped from her mother’s arms in Haltom City in a flood at a mobile home park along Whites Branch creek. By July, 45 feet of Caraway’s backyard had collapsed into the creek. There were worries that the home on Fenway Court might eventually wind up in the water as well, and Layla and her husband were forced to move in with her parents.
Fast forward to this year: Caraway has written and co-produced Up a Creek, a documentary based on her Haltom City flood experience. Through exhaustive research and her experience working with various government entities, Caraway focuses on how the U.S. Army Corps of Engineers, over more than four decades of studies, had identified the Big Fossil Creek watershed as a serious flooding problem area but could not come up with the $6 million to fix the problem.
Atlanta’s Pittsburgh Neighborhood: Building the Sustainable Urban Community
One Atlanta neighborhood’s experience of the housing bubble and expected transit investment leads it to invest in a land trust and a vision based in sustainability.
By Mtamanika Youngblood and Harold Barnette ShelterForce Feb. 7, 2011
The bursting American housing bubble is shattering long-standing assumptions about the role of housing as a driver of the national economy and as a basic source of wealth creation for families. The unprecedented nature of current housing market conditions, a frozen financial sector, and the uncertain direction of national housing policy makes things even more difficult. Yet with mounting foreclosures and job losses that are, in turn, producing growing numbers of families struggling to get or keep a roof over their heads, access to affordable shelter will only become more important in years to come.
There are ways to redefine affordable housing goals and urban revitalization methods in light of these current housing market realities. Those methods, however, require significant levels of innovation.
The challenges and opportunities in revitalizing the Pittsburgh neighborhood of Atlanta, and some of the directions the neighborhood is choosing to go in response, provide a good case in point, with implications for many other neighborhoods in similar positions.